Ertuğrul GÜRHAN
LYKSOR Business Development Director
Could you tell us about the foundation story of LYKSOR and what it does?
In 2016, the first starting point of the company was to produce raw materials. Turkey has a great dependence on abroad in the sense of raw material and chemical substances. Eliminating this dependence is of course a dream. But to reduce this dependence at least a bit is a fact today. In order to achieve this, Lyksor was established in November 2016 and with the establishment the production of Polycarboxylate-derived raw materials was started. These raw materials were in demand as soon as they are produced. In particular, the Aegean Region consumes additives that generally use Polycarboxylate based raw materials. The sector tells us, “You are producing the raw material and selling this raw material directly to the contributors and abroad. But, as domestic producers and domestic concrete plants, we also need additives.” The evolution of Lyksor starts here. Management started the feasibility studies required to respond to these demands. Afterwards, with the technical service structuring, the finished product, that is, the trials of finished products from our own raw material, begins. From hundreds of additives, hundreds of different dosages trials and very serious analyses are carried out. These are studies that take time to perform these analyses and reveal statistical results.
With 2017, Lyksor started its efforts to produce concrete admixtures. The founding staff of the company have been in the additive, construction and building sector for 20-25 years. We are talking about the founders who gave 20-25 years to this region; Bimen Kadiroğlu and Savaş Tatar. They are very high in terms of reliability, knowledge and experience. Bimen Kadiroğlu is under the management of Lyksor in Izmir. Savaş Tatar is at our SBM company in Denizli. We draw a successful chart as these two founders are coming from the kitchen and then turning this into a commercial dimension. This model is a model that we say I know how to do this work both technically and commercially.
Being able to reach 35 thousand tons annually from 2016 to the end of 2019 is the success of our experienced founder and staff. There is also an innovation in this growth experienced with our portfolio. We are not a simple mixing company. We are a chemical company that produces its own raw material and focuses on innovation. This is a long and tiring process that starts in R&D laboratories and continues with various trials on the production line, resulting in precise results in customer fields. Lyksor’s main strength comes from this innovation in raw materials. We serve with over 50 personnel in our factories in Izmir and Diyarbakir.
How do you position yourself in the building chemicals industry? Why do firms prefer or should prefer Lyksor?
Companies that purchase material from outside are dependent on a supplier. Of course, we buy materials from outside in Lyksor, but we have many products that we produce and have a 100% local product certificate. The main reason why Lyksor is preferred in the market is that it uses the raw material it produces in its own additives and makes it sustainable. If you bring a sustainable and cost-effective product to the market, it will grow instantly. One of the important issues here is sustainability. For example, the reason for the deterioration of the supply-demand curve in many high consumption materials used in the past is that they are not sustainable. At this point, we always try to improve our customers’ quality-cost lines. R&D works continuously. If you receive a different response when you send the product to the field, your brand value will be affected. We have come to this point today because we have not received these reactions. We have experienced staff who have gained experience working in many domestic and foreign companies.
One of the most important points you need for innovation is university support. We work with both Izmir Dokuz Eylül University and some universities abroad. We carry out many projects with our university advisors. We take consultancy services for various tests in product development before placing different product groups on the market and we compare most tests with our own laboratories by making them within the university. Our R&D department has a big share in the product development process, but if you cannot get support from scientists on some issues, one leg of the work is missing.
As Lyksor Construction Chemicals with 100% Turkish capital, can you talk about your activities, production facilities and the countries you are in contact with?
After its success in concrete additives, Lyksor Chemicals decided to start the production of Cement Chemicals in the last quarter of 2018. In this context, we primarily made investments in human resources, laboratories and technical services. In the first half of 2019, we have accelerated R&D and technical service studies by understanding customer expectations with our visits to cement factories in our country and abroad. As a result of these efforts, we realized our first tonnage sales in June 2019 and reached a tonnage above expectations in a short period of 6 months. After successful attempts at Cement Plants located in Ivory abroad, we are rapidly moving towards being the market leader in this country.
In addition, we continue our activities in Georgia, Russia, Morocco, Ghana, Kenya, Ethiopia, Somalia, Eastern Europe and the Middle East. We have representative offices, sales offices and warehouses in many of these countries.
We can manufacture with full automation in our facility located in Izmir Bağyurdu OSB. In addition, with our temperature and pressure controlled reactors, we can easily produce chemicals that are suitable for customer requests, with the guidance of our expert R&D team.
What are your goals and expectations from the sector for 2020?
We have a project to establish a facility in Morocco in the first quarter of 2020. We have a warehouse and sales office right now. We also have feasibility studies on Ghana, Ethiopia, Kenya and Somalia. We exported 35% of the production in cement additive last year. Our goal is to move the export figures higher. We made our first sale shortly after the end of the cement chemicals production and marketing structure. Even if all the dynamics in the market are suitable, the period foreseen for your works to return to sales is normally at least one year. However, thanks to the dedication and effort of our teammates, we achieved this success in a much shorter period of time. In this success, the brand value and infrastructure of Lyksor made our job easier. We also work on micronized grinding chemicals. For example, we also provide milling facilitators to plants that currently do calcite grinding.
2020 will be the year to fully expand abroad for Lyksor. There are strategic regions we have determined; Africa, Russia, Uzbekistan, Kazakhstan, Eastern Europe and Middle Eastern countries depending on the political atmosphere. We drew a circle around them and we will be in every quarter of that circle. We will increase our trade volume with Qatar. We have an important place in the construction chemicals market in Georgia. And our goal is to expand this circle.
It will be an export-oriented year with new markets and chemicals. One of the most important issues we do while doing all this is; Human Resources. We have academic calendars to improve the knowledge and equipment of our colleagues. We will be in social responsibility projects. It will be a year when we launch Turkish products to Turkish cement producers with the raw materials we produce.
What method do you use while carrying out your activities? And how do you benefit your customers?
There is a cost-value model we work with; i.e. cost-benefit analysis. Our technical service makes many experiments with the samples prepared by R&D to meet the expectations of our customers. By evaluating the results obtained in the benefit-cost analysis program, we determine the products we can recommend to our customers. The main goal of all studies is to compare customer expectations with minimum cost and maximum benefit. The sales teams also have an important role in order to establish all these studies on the right basis and to obtain healthy results. We must
understand and report the expectations correctly so that the customerspecific product selection, which we call “tailor-made”, is successful.
How was 2019 for you?
As Lyksor, we knew that 2019 would be a difficult year, and despite the sectoral contraction with the measures we took, we preserved our current team and included new teammates in our team. We have raisedthe current level of success in concrete chemicals higher. As a team, we revised our targets upwards for the upcoming process with the success we achieved in the year when we started the production and sales of Cement Chemicals. Also, the increase in our share in the macro synthetic fibre market was one of the positive developments.
Can we get your evaluations on occupational health and safety and environmental health?
One of our most important priorities is the health of our employees. Cement plants are places where heavy and dangerous works are carried out. We have friends on the field for trials. In some cases, we may even choose not to receive the tender for our employees not to be harmed at all. We all participate in workplace safety and health training, and we care about this issue.
How do you think the economic situation in Turkey would leave an impact on the sector in the coming years?
We do not think that 2020 will be worse than last year, but we do not expect a major improvement. It will be similar to 2019. We anticipate that there will be a positive progress in 2021. The fluctuations in the exchange rate will affect the chemical industry. In order to reduce these effects, if we increase our R&D investments and produce new raw materials, we will be on a safer side on our behalf. However, we cannot say that the building sector we serve is in the same situation. We see that especially the companies that we supply materials are affected by the foreign currency movements of the sector. For example, the cement sector has turned to exports and export records are breaking. Unfortunately, clinker and cement prices are decreasing, while exports increase in sales graphics. I think that the cement factories will turn towards exports this year and the plants will not be much different in terms of production than last year. We spent years when state projects were very intense. In these years, the sector has grown significantly. If similar projects are implemented, 2020 may be a year above expectations. For example, we calculated the amount of cement to be used in Channel Istanbul, which is currently on the agenda. It will be a project with a significant amount of cement use. The production power of Turkish companies investing abroad will affect the domestic market. We will continue to invest with our own strong equity capital. As a company, we believe that it will be a positive year both for us and abroad.